National Teacher Day: What’s the Value of a Good Teacher?

May 08, 2018

National Teacher Day honors teachers for the lasting contributions they make to students’ lives. Research confirms the importance of good teachers: Students taught by outstanding teachers have higher achievement, are more likely to attend college, attend higher quality colleges, and earn higher salaries than students taught by average teachers.

Given these impacts on students’ lives, one might wonder: What’s the value of a good teacher?

If this were a Mastercard commercial, the answer might be simple: priceless. But teachers can’t use good feelings to pay the bills. In fact, the recent teacher walkouts in several states have brought renewed attention to the issue of teacher pay. So now is a good time to explore how much districts pay teachers and what research says about how much good teachers could be worth.

How much do districts pay teachers?

The average public school teacher in the United States earns around $59,000 per year. According to the National Center for Education Statistics, the average salary of a public school teacher was up about 6 percent in real dollars since it began tracking the data during the 1969–1970 school year. But it was down more than 4.5 percent since peaking in 2010.

Moreover, average salary says much about the seniority of the teacher workforce and less about entry and maximum levels on the pay scale. According to the Organization for Economic Cooperation and Development, teachers earn less than other workers with the same education level in many countries, but this gap was widest in the United States. And the small difference between starting salaries and salaries at the top of the scale suggests very little differentiation.

To attract and retain highly effective teachers, some schools and districts have offered them much higher pay and other financial incentives. Many of these efforts have been independently evaluated and shown to improve student outcomes.

For example, The Equity Project Charter School in New York City offered teachers an annual salary of $125,000, plus bonuses based on schoolwide performance. High-performing teachers in the Talent Transfer Initiative received a $20,000 bonus to transfer to low-performing schools for two years. And high-needs districts that participated in the Teacher Incentive Fund evaluation offered teachers a maximum performance bonus of $7,000 to $9,000 per year. Evaluations showed that these efforts all improved students’ achievement, but The Equity Project Charter School made the biggest impact.

Of course, what districts pay teachers may differ from what teachers are worth. Many factors affect teacher pay, including teacher supply and demand and the politics surrounding issues such as performance pay. Maybe we should also consider the monetary value of teachers’ contributions to students’ lives.

Because researchers typically measure teachers’ contributions relative to those of other teachers, this approach gives us an idea of how much a good teacher is worth.

How much are good teachers worth?

In one study, researchers at Harvard University and Columbia University examined the increase in students’ earnings associated with having a good teacher. They found that at age 28, students who were assigned a teacher in the 84th percentile of teacher effectiveness earned salaries 1.3 percent higher than students who were assigned a median teacher.

Under some assumptions, the researchers calculated that the current value of a 1.3 percent increase in lifetime earnings works out to be about $7,000 per child, or $200,000 per classroom—more than three times the average teacher salary!

These findings suggest that the increase in students’ future earnings alone could justify higher pay for high quality teachers—which truly motivates the need to identify these miracle-working teachers. But teachers can affect students’ lives in ways that cannot be easily measured or translated into monetary terms. Many of us have had amazing teachers whose value does seem priceless.

So today, on National Teacher Day, we should thank all the great teachers out there for the contributions they make to kids’ lives.

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The opinions expressed are those of the author(s) and do not represent those of Mathematica Policy Research.

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